While traders are accustomed to observing top performers like Nvidia (NASDAQ: NVDA) and Meta Platforms (NASDAQ: META) in 2024, there’s a surprising contender among these giants.
Constellation Energy (NASDAQ: CEG) stock has emerged as the second-best performer among NASDAQ 100 stocks, boasting an impressive 52% growth since the beginning of 2024.
As of March 20 close CEG stock is trading at $175.71, marking a 1.91% increase from the previous session, as well as adding 4.68% over the past five trading sessions.
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In the last month, CEG shares have grown by an impressive 33.72%.
Investors’ enthusiasm for Constellation Energy’s financials and future outlook has propelled the stock to outperform industry heavyweights like Netflix (NASDAQ: NFLX) and Advanced Micro Devices (NASDAQ: AMD).
Strong financials and guidance as a basis for CEG stock growth
The surge in Constellation Energy’s stock price can be attributed to several factors, including their quarterly and full-year results, which exceeded expectations.
The company reported an adjusted EBITDA of $4.02 billion for the year, representing a significant increase of over 50% from $2.66 billion in 2022.
This figure also surpassed the company’s guidance, which had been revised upwards twice since the beginning of 2023.
Additionally, Constellation maintained its reputation as a top-tier operator, achieving a capacity factor of over 95% on its nuclear plants in the fourth quarter of 2023. This performance not only exceeded its figures from 2021-22 but also surpassed the industry average by more than 4%.
Aside from strong financials, Constellation Energy’s impressive stock performance was primarily fueled by optimistic forward guidance, providing clarity on strategies for sustained growth.
This guidance outlined key drivers such as an anticipated 10% annual growth in base earnings, propelled by rising demand and a growing preference for nuclear power as a clean energy option.
Additionally, the impact of nuclear Production Tax Credits (PTCs) played a significant role, establishing a price floor for power that escalates with inflation, further bolstering the company’s outlook.
Analysts expect further growth for CEG stock
The impressive performance of CEG stock has garnered attention on Wall Street, with analysts increasingly optimistic about its future trajectory and initiating bullish projections.
Notably, on March 19, Wells Fargo’s Neil Kalton raised the price target on Constellation Energy stock by 5.7% to $185, maintaining a ‘strong buy’ rating.
Similarly, on March 4, UBS revised its outlook on CEG shares, significantly raising the price target to $201 from $151, while also upholding a ‘buy’ rating.
While this represents a small sample, it’s anticipated that more analysts will adjust their forecasts for CEG stock, given its robust financials, performance, and promising guidance.
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